Replay: Live Q&A What is the Best Annuity for You? February 2022

0:00Intro

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[Music] [Music] so [Music] welcome everybody to the annuity man live i'm stan the annuity man america's annuity agent thank you for joining me on a great saturday morning for a lot of you saturday afternoon for some of you across the nation um do me a favor and

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start typing in your questions we'll take them one at a time we'll answer them uh factually and brutally factually as you know that's what i do but before we get going i want to cover a couple things number one with your questions no tax questions please

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i'm not a cpa i'm not a tax lawyer and those are the only two people and qualifications on the planet that should be asked tax questions but what i want to do quickly is our site is ever changing and improving uh my team is fantastic and i just want to show you a

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couple things if you're not familiar with it we're going to take you know just a few seconds to look at that so producer if you can pull up the site we can kind of look at that real quick and i and then you know we're waiting for everyone to type in their questions

1:45The Annuity Man Website

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but this is the site a couple things i want to point out is obviously at the top left you can book a call with me if you want to do that you get me for 30 minutes uninterrupted uh if in the middle is use the calculators producer if you can click that real quick and

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show the calculators that are available you can run these these quotes 24 7 365. no one's going to call you etc the only one that we're going to have a day delay on is the indexed annuity quote the fia calculator because that's a whole different ball game but with qlack spea dia

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income rider and the myga feed you know those are live you can look at those 24 7 365. if you see uh see live rates that box right above that beautiful picture me if you click that that's the migrates live feed 24 7 365 all you have to do is punch in your state and then your

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year years guaranteed that you're looking for um so click that real quick producer and then you can see you know there's alabama but if you want to go back up to and find out what a five year is just go back to the change state in years click that you're gonna have the

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drop down you hit five and you hit see rates it's real simple real easy and then the last thing i want to point out is the get the books you can get the books right there at the top right i'll ship them to you for free and under an obligation by the way this offer is

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going to go away sooner than later um we we've got something new coming up but the books are dinosaurs but they're great dinosaurs they've got now shipping to your hard copy and go to the book of call thing real quick and show that so you can get to um you know you can book a call and

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you can set a time and pull my calendar up and click it and you'll get all kinds of confirmations and things like that a couple other things before we get started the questions are starting to pile up number one if you don't know this i have a podcast

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that comes out every tuesday called fun with annuities and it's not just about annuities i have major league guests like paul merriman and wade fowle and mosh milafsky's coming on christine benz has been on i mean we have a ton of people you can see the

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replays here but every tuesday we put out a new one and we're covering everything from medicare to social security to retirement planning to lifestyle everything so that's uh that's another thing and then one last announcement is if you go to my youtube channel um

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producer if you can do that that'd be neat maybe i'm changing gears real quick but stan the annuity man youtube channel obviously we have 500 plus videos and we're putting them out all the time but we have a new version of a video that's called shooting it straight with

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stan and what shooting it straight with stan is is me covering topics that are timely and um you know that's that's the page etc and the shooting is straight if you see the second one there at the top line that's going to come out when i think you need

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to hear something that's happening right now and that's new for us uh the other ones are more product driven and overall facts about annuities and strategies and things like that but if you see a shooting that straight pop up then i'm i am addressing something

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that's happening right now so i talked about interest rates you can click that on your le at your leisure um subscribe to it etc so let's let's jump in um i

4:58Email Questions

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got a couple of questions that came in via email before the uh before the recording one of them from don don you had three questions if we we have time i'll get to those uh if not i will answer those off air via email to you but one of the questions i did want to cover was from a

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person named roger and he said how does what you offer compete with seven percent inflation or whatever inflation is now

5:26How Does What You Offer Compete With 7 Inflation

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i'm gonna i'm gonna assume roger's asking a legitimate question or maybe he was throwing a dart at me because he knows that there's no such thing that there's no product on the planet that addresses that type of hyperinflation seven percent whatever you consider hyperinflation

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um and if anybody in the annuity industry tells you that they have it they're lying it doesn't exist i represent pretty much every carrier out there and have access to pretty much every product out there and you know with this type of inflation there's nothing that can contractually

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adjust for that now you already own the best inflation annuity on the planet it's called social security you've heard me say that myriad of times um but that's that's not going to increase by seven percent i think it's 5.9 this year but it is the purest form

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if you buy a lifetime income product and there's four different types you can attach a cost of living adjustment rider to the majority of those but understand the annuity companies have the big buildings for a reason and they're not going to give that away and what they do

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is if you want that contractual increase let's just say you wanted a cost of living adjustment for your income stream to increase by three percent every year sounds great right um the annuity company's going to lower that initial payment by anywhere from 20 to 40

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depending on your age to make up for that increase so just just know that when it comes to inflation in my opinion the best way to address that is either to ladder the the start date of the income so you have income starting at let's just say 870 72 75 80 and we have

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it do it doing that or at the time your income floor needs a bump let's just say your income for your social security your pension if you're so fortunate dividend income rental income and you have a lifetime income annuity in there as well to give you

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that monthly income stream that you're looking for that's called the income floor in my world um and you say well you know what i need an extra 500 then what we do is we go reverse engineer that quote to solve for that 500 amount at that time using the least

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amount of money and by the way on my site the annuityman.com when i showed you the calculators all of those calculators you can run reverse engineer quotes especially the spea idea and income rider you can say um here's a hundred thousand dollars what will that

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pay me or me and the spouse for the rest of our lives or you can put in hey um we need to solve for twenty one hundred and fifty dollars a month how much money will it take to do that and we're going to quote all carriers either way you can either do

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lump sum or reverse engineer quote but that's the way to truly address inflation roger i i'm sorry that there's no product out there and like i said if anyone says they have it especially in the indexed annuity world someone in the index annuity world said yeah this index

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annuity will adjust for inflation get up and walk out that's the sales pitch it's garbage and and they're lowering lowering the initial payment to make up for that and it's typically a six to nine year break even point so um with that that let's let's jump into the

8:13Is There An Annuity For LongTerm Care

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questions i'll read them and then i'll go over them this is from john and christy taylor and their question is there an annuity specifically for long-term care and the answer is yes it is a health insurance product life insurance companies issue annuities

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okay and you're going to hear at the bad chicken dinner seminar that you can buy this index annuity with an income rider and you get double double the income for long-term care that's that's not true that's a sales pitch and just as a side note i sell more index and news and pretty much

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anyone on the planet we have no problem with index annuities we just don't hype them we tell you the facts about them whether you want them for accumulation or you have an attached income writer but getting to this specific question from john and christy the long-term care annuity

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um i use a person named jack lindenberg and if you want to you know if you want to email me i'll send you his information and contact information but he is the number one long-term care expert in the country he handles all of our long-term care issues and and for people that are

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really looking at because there's three different types of long-term care two of them are asset based meaning that you're not going to lose any money if you don't use the uh the long-term care benefit a lot of people say well i'm going to buy long-term gear because money goes poof

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that's one of the three ways the other two ways which is a long-term care annuity um it's a health insurance product and jack can help you out with that let me give you uh some insight in a and a trick a trick of the trade a factual trick of the trade so if someone's pitching you

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something that sounds too good to be true and they're calling it long-term care ask them does the long-term care benefit you're talking about is that tax-free and if they say no then that's not long-term care because long-term care benefits are tax-free just giving

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you some insight so so just send me an email at stan at theannuityman.com and i will i will forward the jack lindenberg's um information to you and you can connect with him he is just like me an absolute factual brutally factual straight shooter you know there are people like us out

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here that aren't just looking for nails and we're the hammer so he's like he'll listen to you he'll tell you if it doesn't fit he'll tell you what the best product is he'll quote all carriers etc so next question

10:25How Does The Income Rider Work

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it's from harry um how does the income rider work and is is it advisable with every good question with every single person that calls me or contacts me you have to answer two questions what do you want the money to contractually do and when do you want those contractual

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guarantees to start now if you say stan i need income start you know two years three years seven years five years nine years then we're going to quote two products deferred income annuities which also can uh include culax qualified longevity annuity contracts and income riders

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because both of them guarantee future income to the penny you know what exactly what it is regardless of when you want to start the income in the future income riders are attached to either variable annuities or index annuities i don't sell variable annuities because they i don't sell

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anything that has the potential to go down in value and in addition the income riders attached to variable annuities are not typically competitive with and historically competitive with the income writers attached to indexed annuities but when you say stan i need income in

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the future and we're quoting income riders attached to index annuities we are not looking at the index option strategies of that index annuity we are focusing solely on the income rider guarantee because at that point in time when you say stand i need income later

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it becomes a commodity quote we got to quote all income riders out there for the highest contractual guarantee for your specific situation let me give you a visual with income riders when you attach it at the time of application for future income to an indexed annuity draw

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a line down a blank sheet of paper middle mil just right down the middle left hand side is the index option side which we really are not going to focus on right hand side is the income rider benefit side it's monopoly money in the phantom account but it's always going to

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be the highest valuation of which we're going to use to determine that contractually guaranteed income so the answer to your question harry is if you need income in the future and you want to control the asset meaning you don't want to annuitize you don't want to lose control

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of it but yet you want to have a contractually guaranteed lifetime income stream than an income rider is appropriate we just have to shop all carriers for the best increment there's no such thing as the best income rider in the best company with the income

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rider these are commodity products it's like shopping for a plane ticket and you know on my site you can do income rider quotes either lump sum or reverse engineer next question

12:41Laddering

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sam the man okay sam it would be sam the mam by the way if you just want to be phonically correct i am better off to take 10 am i better off to take 10 10 000 annuities spread out over several months or 100 000 annuity that's a good question first of all our just just for

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example sake our minimum is 20 000 um here at the annuityman.com but what i would do sam is is we would just get on the phone and i'd run those quotes and we'd do an apples-to-apples comparison to see which one would work now in your situation let's say what you're talking about is is

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laddering either laddering the purchase of annuities um or laddering um the start date of an income annuity i don't know if you're talking about a principal protected annuity like a multi-year guarantee annuity fixed rate annuity or a lifetime income annuity i'm assuming

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you're talking about lifetime income if you are talking about lifetime income it does make sense to ladder start dates uh so that you know you can address inflation if it's coming because you have income streams starting in different years for instance in this

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situation you could have income starting in 71 72 73 etc if you laddered um the start date in other words you would buy all the annuities at the same time we'd spread them out amongst different carriers and have income starting so you can ladder laddering is is a topic that

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we i'm going to just kind of briefly go over you can ladder for principal protection so in a mayaga fixed rate annuity you could say i want a three year four year and a five year miga so that we can roll them or or attach them to higher rates as the money

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matures or you can ladder income having the income start date at different intervals or you could ladder the purchase date of that those income annuities and the start date as well so you know those are things that are customizable and i i love working one-on-one with you to put

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together a customized plan next question sam the man again for converting a traditional ira to roth and then investing the roth into an annuity for growth what is the best type annuity for this let me this is a great question let me let me brutally hammer this one in my

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opinion in a perfect world where the unicorns do chase the butterflies i do not think roth iras the majority of the time should be used for any annuities roth ira since you've already paid the taxes should be for pure market growth once you say pure market growth then you've fully

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eliminated all annuity types i am the only person that's going to tell you that truth so there is no market upside with no downside there is no buy this variable annuities the best thing ever no if you want real market growth do not buy an annuity and so in this case i

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would tell you please use that roth ira for the growth portion of your portfolio um so but but let me rephrase that question now that i've answered the roth part you know what's the best type of annuity for growth um once again i don't believe that annuity

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should be purchased for market growth but it depends on the type of growth and the type of return that you feel comfortable with if you say stan i want seven or eight percent growth never buy an annuity and never buy an annuity from anyone who tells you

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they can get you that because after the policies issued you're going to find out that that's not the case so bottom line summarizing this roth iras in my opinion having done this for a long time decades and decades that should be for your non-annuity growth assets

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if you want to talk growth we can but it's going to be contractual and in that two to four two to five percent range uh while you protect your principal okay next question

16:15Raising rate environment flattening yield curve

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michael sullivan is this raising rate environment and flattening yield curve in this sorry about that how can this be a good time to buy any rates well first of all and that's a good question there's no i mean and this isn't a sales pitch so so hang in there with me you cannot time it

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i know you think you can you can um first of all if you're buying a lifetime income guarantee annuity type and there's four different types immediate annuities deferred income annuities qualified longevity annuity contracts and income riders attached to deferred

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annuities those are the four strategies for lifetime income the primary pricing mechanism of those four strategies is your life expectancy and mortality credits at the time you take the payment interest rates play a secondary role interest rates play a secondary role

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interest rates play a secondary role they would the interest rates would have to significantly move to move that pricing needle now from the standpoint if you're buying mygas which is the annuity industry version cd type annuity where you're getting just a guaranteed interest rate

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for a specific period of time say two three four years i would just tell you to ladder those rates you cannot time it etc there's always going to be a reason for you to say well they might raise it again or they might raise it again or they might raise it again that's the reason that we

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ladder whether you're laddering income or laddering for principal protection laddering is the way to address rising rates and you know i know that they've come out and said well they're going to raise rates seven times i hope that's true but i you know the fed needs to act

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independently as they were put in place to do let's see if they do or if they're going to continually be bullied like they have been in the last four or five years next next question

17:55Best case for using a RYLA

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scott baker can you expand explain the best case for using a ryla and a ryla is um i don't sell this because that's a registered investment product um it's like an index annuity that brokers can sell in my opinion and i call those also copay annuities because most of them not

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all but most of them give you a little bit more upside than say an indexed annuity but you share in the downside i.e co-pay my opinion okay going back to a previous question if you're looking for market growth do not buy an annuity okay please you're not

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gonna get to have your cake and eat it too the historical returns are what they are which is a two to five percent number um and you can do you know three percent right right now in a multi-year guarantee annuity but if you have an advisor that's that's pushing ryla's you

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need to ask them are you managing my money my money are you are you selling me packaged products if you're getting your money managed by a fee only or fee based person hold their feet to the fire and have them manage your money with items that don't have restrictions

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on the upside that's my opinion but that's my opinion on riley's nothing wrong with them i just don't know if you need to be that fancy go ahead next question lisha could you provide an

19:09Index annuities vs deferred income annuities

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overview of fias index and nuis versus diaz and spias and the differences for someone that may be retiring in a few years and does not need income now if you do not need income now then you don't need an immediate annuity okay if you do not need income now and you need

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income in the future you want to know to the penny what it's going to be then we're going to quote diaz deferred income annuities which by the way is the same structure as an immediate annuity from the standpoint of simplicity no cost no annual no annual fees you know

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it's just a straight transfer of risk and we can quote diaz and and um income riders but you could also buy migas or indexed annuities without riders and then buy an immediate annuity at the time you need income or at the time that that policy matures if you said stan i

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want to strip out all the fees i never want to pay a fee and i want lifetime income i call that defer to spea and what defer to spea means is you you're buying a principal protected fixed annuity whether it's a migra or an index annuity and then at the time that duration and

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maturity happens then we go shop all single premium immediate annuity carriers for the highest contractual guarantee and do a transfer ira ira if it's ira money or 1035 transfer if it's non-ira money either way it's a non-taxable event and then so we go from

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the deferred annuity that's been protecting the principle and growing at a specific interest rate or cap spread whatever that two to four percent range and then we buy the immediate annuity on the back end something we need to talk about at this point in time with index

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annuities for accumulation there are two that i feel comfortable with um just because there's a lot of games being played in the next annuity world from the standpoint of renewal rates and that's why you hire me because i know so next question

20:55Buying an immediate annuity in an IRA

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rajiv if i want to buy an immediate single premium immediate annuity within my ira what is the process to do that how is it different from buying it outside the ira good question um all annuity types you know qlax qualified longevity annuity contracts are the only one that's you

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can only use it in a qualified contract but spears diaz income riders this can all be non-qualified or qualified works the same way the contractual guarantees are the same it's just the taxation of the income coming out so you know those are conversations that we need to have book

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a call with me about which which accounts make sense the ira or the non-ira accounts to use to buy an immediate annuity um but just understand that the contractual guarantees are the same if you're buying a single premium immediate annuity in an ira the income

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coming out is taxed at ordinary income levels because it's inside of an ira i know there's a lot of advisors that don't know what they're talking about and say never buy an annuity instead of an ira some pretty prominent people are saying stupid things like that it's

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stupid it's crazy and they should look up cue lack because the that's an annuity that's specifically designed to be used in an ira when you're using ira assets and you're buying fixed annuities what regardless of type my just be a dia q lak income rider you're buying the

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contractual guarantees right you're just putting it in a tax deferred instrument and when money comes out it's taxed at ordinary income levels just like any asset inside of that ira next question

22:23Early withdrawal penalty

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lois um if the annuitant dies during the accumulation period of omega does the early withdrawal penalty apply when funds are distributed first of all annuitant means payee so i'm gonna i'm just gonna semantically change that to owner so if the owner dies during the accumulation period

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most mygas most mygas when you die there's no penalty death penalty okay you get the money in the accumulated interest but there are some that if you die then there's going to be a penalty that's the reason you need to talk to me because i'm going to make

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sure that we match you up with the uh migo company mica carrier that has the highest interest rate and if you want to make sure that if you die early in the contract there'll be no surrender charges penalties or fees then we choose that but not all mygas do that most do however

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next question and a sip of tea

23:17Lead time when rates rise

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church legal center clc small that's the acronym um i understand rates are secondary yes they are thank you very much but stan the annuity man what is the lead time once rates rise to see higher payouts that's a really good question john at clc um

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i have a you know and i don't have any documentation of this but i've been doing for so long that i always say when rates go down annuity companies move pretty quickly when rates move up they kind of yawn and stretch and it's like going to a junior high school dance boys

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on one side girls on the other and it takes two maniac boy and girl to start dancing and then everyone starts dancing right bottom line is once carriers a carrier or two moves and starts raising rates then people will follow we just don't know what that time period is going to

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be i think right now if you look at migrates in the last 30 days a lot of the the fixed-rate annuity company mica companies have raised raised their guarantees in anticipation of the march fed movement but um you know this will be an interesting year if the fed does hold

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strong and they do remain independent and they do raise rates ongoing on how quickly the annuity companies move and react to that remember and this is so important annuities are commodity products i keep saying that but there's a reason because it's true and that's the reason we

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represent pretty much every carrier and allow you to shop for these things and quote these things and remember every seven a day is like a gallon of milk going bad these these quotes change typically uh sometimes they do sometimes they don't but if you put that in the

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back your head then you keep checking you keep checking but um but john there really is no good answer on on what they do because it's a commodity product kind of like buying a plane ticket you know the carriers are going to watch the other ones to see what they do and

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if they want to raise money and stay in the game they're going to raise rates with the first one that goes out and raises rates uh initially and is as they say pioneers take all the arrows right but that's the answer next question

25:19How to set up a future guaranteed income stream

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dan mann 61 what is the best way to to set up a future guaranteed income stream with provisions for defined say five years with the income increasing for long-term care okay that's that's a that's a pretty multi-faceted question but if you wanted to do that in other

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words the way they understand this question i apologize if they get it wrong is i want to buy a future income stream you know when i when it starts i want it to pay for five years pay for a specific period of time five years seven years ten years in other words defer for f

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let's give an example stanley would put a hundred thousand dollars in i want to defer it for five years i want income started for five years and i want it to pay for five years and then it's over i'm filling a gap stan i'm doing a gap fill the only product that will do that

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is a deferred income annuity dia and that's a customized quote that's not a quote that we we uh we allow you to run on our site just because you know it's a one percent or half of one percent people that ask me that just shoot me an email stand at the annuityman.com give

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me some parameters and i'll run that quote for you and send it to you personally next question

26:23Thoughts on taking money out of an annuity after year 1

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sam again sam the man what are your thoughts on taking money out of an annuity after year one um and investing in a different company or index i'm not for that at all and whoever if someone has suggested that they're either dumb a dumb agent a stupid agent or a sociopath agent or a

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combination of the three um when you ten percent people say well you know this guy for me this annuities got 10 free withdrawal that's not a benefit that's getting your money back in pretty much every single indexed annuity out there has a provision for that

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some migas do not all mangas do but that you shouldn't put a i mean that's liquidity and that's good that you have it but don't don't say well that's great no that's just part of the rules but i don't think you should be taking money out and then buy buying another new we would never do

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that we would never ever be a part of that type of transaction and anyone that is um that's coming up with that i'm hoping that just was something you had in your head and not a sales pitch you got because if it's a sales pitch that person could lose their license under

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the laws of twisting and churning accounts that's in essence churning an account so once again remember and i say this a lot maybe not on this this live event but i'm getting ready to say it annuities are math okay they're math products they're contracts if the math works fine

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um if we if we can be fancy and i've come up with something that the math works and it's in your favor fine but in most cases in situations like this this the math doesn't work doesn't work in your favor and the only winner is the sales agent the agent that's that's uh

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soliciting something like this next question

27:59Can an income rider be shopped around

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john my wife uh john and christy my wife has an annuity that has not been turned on yet i'm assuming that's an income rider attached to something can that be shopped around to see if we can get a better rate if it's an income writer the answer is no once again drawing a line

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down a blank sheet of paper indexed option site on the left hand side income rider side on the right hand side and spoiler alert the right hand side is always 100 of the time going to be higher why because you can't transfer that cash that in or

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or peel off that interest rate of that income rider that's growing by six or seven eight percent that's not real yield that's just the income account growing for a future income stream when you turn it on you can't shop it pre and i say this fairly carte blanche about every every

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income rider attached to an annuity if you have an income rider attached to an annuity you're probably gonna have to stay there and turn on the income stream to access that benefit because if you said stan i don't care what you say i want you to transfer this this annuity

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and find us a better income writer legally during the application process we have to do a side-by-side comparison mathematically to show that the annuity that you're coming from and the annuity you're going to the annuity that you're going to is mathematically better from a contractual

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guarantee standpoint and because the income writer doesn't transfer that's impossible unless the application is doctored and in that case the agent should lose their license okay next question

29:25My agent is in the process of doing a 1035 exchange

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lois your agent is in the process of doing a 1035 exchange for us that would be me lois the only problem is that one of the annuities is dragging his heels hey you know what that's a good question and um and you know my team is good as you as you know but we are at kind of

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the mercy of where the money's coming from um and a lot of these companies do drag their feet and we do we're on them every day and um you know we'll we'll get you on the phone with them with us to to push them but they drag their feet they call it conservation in the

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business think about it like this if they have a thousand policies that represent a hundred million dollars let's just throw a number out whatever and they can hold on it to hold on to it for one to two more days they're going to make a little bit more money is that

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right no it's not right i hate that but it's reality and that's the reason i have a team that just does application and just does follow-ups with these carriers but we're pushing as hard as we can last resort is kind of getting you involved so that you can sternly advise

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them and encourage them to move the money we typically don't have a problem after that next question

30:31My son is the beneficiary

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david c nice nice motorcycle in the picture stan i have annuities and getting remarried my son is the beneficiary does he get the money the person that gets the money of your annuities is who you list as the beneficiary if you die or your motorcycle hits the tree hate to be

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morbid but it the person or persons or trust or whoever you list is beneficiary is going to get whatever unused portion of that money um if you set it up like that if you set it up cash refund or installment refund or if you have an income rider attached

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to a variable and indexed annuity they're going to get whatever money's left over next question

31:09Is there a standing annuity man

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heart man stan hi there is there a standing annuity man for variable annuities no there's not i used to be stand the annuity man for variable annuities when i used to work at morgan stanley and ubs and peyton webber and dean witter so i was that person um but no there is not

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that person um and i don't know why i think it's just a very convoluted market just remember most variable annuities have an average three percent annual fee for the life of the policy that make them bad but it is what it is there are some good no load variable annuities out there

31:44

um but those typically come with a provision that they have to be managed so if you want if you want me to uh to maybe introduce you to a fee only person that i would recommend that could oversee it i've done that on a couple occasions i have that person but they

31:60

don't call themselves the variable annuity man so next question

32:04I like the idea of a QLX

32:05

hey vern i like the idea of a cue lack presently 75 and the like idea of reducing rmd blah blah blah advisor said do you really want to have iron gum at 85 and not might be spending as much okay let's talk about q likes in general qualified longevity annuity contract was

32:21

issued by the department of the treasury and our friends at the irs for use in your qualified money ira type money traditional ira so that you can take at this time of this taping 145 000 25 of your ira or 145 000 whichever is less and you can defer as far out as age 85 aura you could

32:42

start it at 872 73 75 whatever you choose but 85 is when they tap you on the shoulder and say hey you need to turn income on you buy q lex for two reasons number one in a lot of cases people are buying q like so they can attach their spouse to their to the queue like for joint

32:58

lifetime income and the other reason is to address inflation with with income starting at a future date the i guess a positive that people kind of hang their hat on is the and this is this is a fat is the 145 and a q lac assuming you qualify for that the maximum amount is not used to

33:17

calculate your requirement of distribution so you there is a potential for you to save taxes on those rmds but the first two reasons are are more of a reason for you to buy it than just to save taxes in other words i would not recommend you buying a queue like just

33:33

because you're going to save taxes on the rmds i'd recommend you buying the key lack to address future inflation and to and or to add a spouse for future lifetime income next question

33:43fraternal insurance companies

33:45

rupert love that name uh what do you think of the fraternal insurance company mygas um fraternal insurance companies and he's talking about um i mean the names are there um they're they're fine and it really comes down to the claims paying ability of of the fraternal or order

34:03

um that you're uh that you're dealing with and you're going to have to do that research i don't do that research i do know this that those fraternal org organizations um unless it's changed in the last year are not covered by the state guarantee funds if something goes wrong so you

34:18

have to do your homework and a lot of times the fraternal organizations have a good rate you just got to be very careful because they're very very small and you want to make sure that they can back up the claims um out there but i don't see any problem

34:30

with it we don't sell them just because it doesn't require agents in most cases it's kind of like buying a charitable gift annuity from good old state you you know i helped hillsdale college with their charitable gift annuity program a long time ago and that doesn't take an

34:44

agent because you're giving them the money and they're promising an annuity type return and a tax benefit attached to it so just do your homework if you're shopping or someone locally if you're part of a fraternal organization and i'm a you know i've never said this before

34:58

i'm going to say this i'm a moose club member or an elks club i'm i'm a member i've been members of that for all a long time if they're offering a fixed rate annuity then you got to go in and look at the elks club financials and make sure that they can back up those claims

35:12

so no i'm not going to give away the um the secret handshakes but i am a moose and elks club member so anyone out there that's that that's a great organization two great organizations that do great work locally next question

35:25convex ranking

35:26

richard how is how important is the convex ranking and if you don't know what that is if you go to my site scroll scroll scroll scroll all the way down maybe maybe producer let's show them where the convex ranking is on the site that would be nice that'd be a nice

35:38

thing that way i can get a sip of tea and we can do that so if you scroll all the way down and what richard's talking about is we're we're one of the few companies that paypay pay for this thing and then we give it away so there's comdex rankings click it

35:53

and then if you go there there's there's me it's a great video just phenomenal video that i give and then if you scroll to the bottom of the page and you hit um download the condex report with this is updated once a month okay now what kind the reason i'm doing this is when you

36:08

see it you're gonna go stan that is so nice of you to give that away so pull that up if you can't produce it since i've sold it so well um but what it does is it shows you all of the life insurance companies in the country okay and they're sorted by

36:23

conduct scores 100 is a perfect one but if you see there it lists all of the rating services am best standard poor's moody's and fitch and it gives a convex score one to a hundred now the problem with this report is if the companies aren't buying all of the rating services a lot of

36:40

times they get dinged on the score okay but like for instance on an immediate annuity i just say listen 80 and above were fine dia 80 and above were fine q lakh 80 and above refined everything else i got to go in myself and do the uh i you know i look at

36:54

comdex i look at their rankings um but i do some analysis on their financials etc but i think this is a good starting point for you it is important richard i think to the importance is to do your homework and i always say there's never an urgency to buy an annuity the urgency is

37:09

for you to fully understand it and do the research on it had a situation yesterday where we did an immediate annuity and the top four the first one was an 80 on the comdex score and the next three were 96 to 98 on a convex score so the number one contractual guarantee was an

37:25

80 on comdex because we pulled it up she goes what's the conduct i said okay let's look at it and then the other three were ones of 96 and the other two were like 98s or something she chose one of the 96 to 98 ones because she said i just feel more comfortable there

37:39

that's fine and i will tell you that i need i'm not going to say well you need to buy this one because i don't go on trips to bora bora if i sell enough of them i don't do that we're gonna i want you to feel comfortable with with the contractual guarantee now i'm never ever ever ever

37:53

ever gonna put something in front of you that i do not feel they can back up the claim so if she chose that one with an 80 comdex pound the table they can back up the claim they can i've looked at their financials but she didn't feel comfortable with that at the end of the

38:07

day it's your money you have to feel comfortable next question

38:10life only income

38:11

rupert i ran a couple dia quotes the other day and the life only income was priced less than the life with refunds sometimes that happens that's interesting and yes that's that's you say well wait a minute the life only means when my legit hits the mountain money goes poof shouldn't

38:25

that be higher than life with cash refund or life with installment refund where the evil annuity company doesn't keep a penny yet they're on the hook to pay regardless of how long i live common sense would say yes but that's the reason we quote both because

38:38

if it's even close we choose cash refund life with cash refund if it's even close because it makes sense but yeah that does happen sometimes rupert that's not a mistake it's just companies trying to fill specific tranches with specific age ranges and structuring and structures

38:55

which is how they do it next question harry can you explain the pros and cons of a flexible premium indexed deferred annuity with an income rider which is what every hack in the planet is selling i mean i don't care if you walk into an annuity person's office not

39:13

mine of course and say mike you know i got sore throat and i'm like my ankle hurts they'll be like you know what you need a fixed deferred income indexed annuity with an income rider why because those do provide the highest contr the highest commissions to agents i'm not saying

39:27

that's bad all commissions are built in you never see them but the reason that you always see people agents out there and the reason the annuity industry has earned its bad reputation in a lot of cases is because they are square pegging a round hole they're not asking the two

39:40

questions what do you want the money to contractually do and when you want those contractual guarantees to start um the pros of of uh indexing new within incorporator is you can control the asset you get cd type growth two to four percent okay yes two to four percent not

39:55

mark i don't care what they show you on back tested numbers i don't care historical numbers around two to four percent okay but you you guarantee the income amount at a future date so so you know what the income stream is going to be you protect the principal you're not

40:08

going to get any type of market loss the cons of a of an index knew with an income rider is that typically you have to lot the surrender charge time period is anywhere from seven to ten years we do offer one for accumulation that has a five year surrender charge with a 96 out

40:23

of 100 comm deck score um but typically with income riders they're seven and ten year surrender charge chassis one more thing here if you let me um digress a little bit about index annuities you know we're all familiar with turkey season and duck season and hunting

40:37

season and fishing season january february march in the annuity world is officially annuity bonus season you're going to hear crap out there like you can get a 25 bonus you can get a 35 up front bonus now i need to stop everybody here there's not a philanthropist at an

40:54

annuity company that's decided to give away money period end of story there's a hundred pennies in the dollar so some jack lag annuity agent said no i can get you 25 bonus or 35 bonus there's not a i mean that's not free money don't don't uh elbow your spouse and go well that's a

41:12

good deal and if someone says let's transfer your annuity with surrender charges to this other one with the bonus and the bonus with will offset those those surrender charges that agents should lose their license immediately that's called twisting that's called churning and in the

41:28

industry it is totally frowned upon and it should never ever ever happen the reason i kind of i'm getting on set box here a little bit i'm six six so i don't need to step up too high is because bonuses are just part of the overall contractual guarantee and here

41:43

let me give you an example your question if you said stan let's go shop the best income riders on the planet attached to income annuities because we need income me and the spouse need income in seven years from now okay great we're going to shop all income

41:56

riders with and without the bonus we don't care we're going to shop them all guess what spoiler alert majority of the time the ones without the bonus have the higher contractual guarantee i call upfront bonuses candy for the stupid take that the right way don't be

42:13

the rube at the table buying an annuity for an upfront bonus an index nude for an up front bonus is like going to the car dealership and saying no no no don't tell me about the engine no and don't tell me about the transmission and oh no don't tell me about the tires and the

42:26

steering and all that stuff i want to know about the stereo i'm going to buy this card just for the stereo system that's how stupid it is when indexed annuity gunslingers are out there leading with upfront bonuses we never even talk about it i got a call the

42:42

other day this is great we ran an income rider quote and in this specific case the uh the one with the bonus did finish first and sometimes that happens sometimes it doesn't so he bought the annuity he was sending the policy he calls me goes wait whoa whoa why is it

42:55

starting at such a higher amount on the income side i said well you know there's a bonus attached it's just part of the overall contractual guarantee he didn't even know about the bonus until he got the policy why because we're focused on the real number which

43:06

is the contractual guaranteed income number don't get caught up on bonuses don't get caught up on roll-up rates oh yeah this is growing at seven or eight percent no jimmy carter's building houses in georgia that's not seven or eight percent yield that's just a growth

43:19

amount for the income stream that you can only access if you turn on the lifetime income stream i'm sorry for the intensity but i do not like annuity bonus season and every january february march it's a fire sale and people say well you've got to sign the paperwork now to get the bonus

43:35

that's crazy talk and i wish the annuity industry would stop this nonsense because it's the reason the annuity industry has earned its bad reputation next question

43:45deferred income annuities

43:47

mel t if i run a quote for a 42 year old male dea with a lifetime income writer what's the early stage i can turn on okay let's stop for a second there's this is a very good and complex question number one deferred income annuities don't have income writers a deferred

44:00

income annuity is a standalone pension product and income rider is and is attached to an index annuity so you're combining two products that don't that product doesn't exist but here's the bigger point and i need you to mel i need you to listen to me you're 42 years old

44:17

or somebody's 42 years they do not need to buy an annuity okay if they're not 50 or if if they're not 50 or above no no 50 and above we can start talking about annuities i had a call the other day somebody had tried to sell a nice lady from alabama who is 38 years old

44:37

an index annuity no next call i got was a from a 43 year old wanting it that someone trying to sell them an index annuity they had actually signed the paperwork i made them free look it no no no no when you're that when you're below 50 you need growth and you can

44:51

handle the market volatility ups and downs you do not need an annuity if you're not 50 the answer is no and there's really there's not an exception to that there might be a asterisk on the sky that i i don't know about or that you can explain to me if

45:09

you want to schedule a call and say stan seriously here's the situation maybe you can convince me that it's that suitable and appropriate but 99.9 of the time if you're less than 50 years old i'm going to say hey call me when you're 50. next question

45:23

that's it for questions that's it for questions well we did we did good it was a 45 minute rip we do these once a month i really appreciate you joining us and i'll see you on the next uh annuity man live i'm staying the annuity man have a great weekend take care [Music] you